Construction Loans

So, we've been rolling merrily along, firming up pricing, in order to finally apply for a construction loan. What I've found is that there are very few banks in which will provide new construction loans for single-family homes. This isn't very surprising, but it is a concern nonetheless. What is surprising is that Abraham had found a lender that specializes in financing the construction of modular homes. This company, based out of Minnesota, is called Land Home Financial Services Inc. (http://www.land-home.net/modular_program_details.html). They offer a "One-Time Close" which modifies the construction loan into a permanent mortgage at completion. While this sounds perfect, it doesn't look like we will have a lot of opportunity to shop around for rates, so we are hoping that Land Home is competitive.

I did call Land Home and spoke to Jason Pachl who handles the territory that includes Illinois. He was very helpful. He said that the average time it takes to get approved for a loan is 30 to 45 days, so if we want to really start this project in March, we will hopefully get our final pricing in soon so we can apply with full knowledge of what the loan amount will be.

In other news, Jeff has bid our project out to several general contractors who he feels will be on board with what we are trying to achieve. We should get bids back in the next couple of weeks, so then I can announce with better certainty what the pricing will be. So far we are estimating that the complete home, including our fancy tastes (i.e. floating staircase, PV panels, high-end appliances, etc.) will estimate at $175/sf. Jeff still believes that the home could cost $125/sf if completed at the factory with their specifications and selections, so this can still be a model for affordable housing in the city. The nice thing is that it can be modified to the owners specifications if they (we) are willing to foot the bill. I still think $175/sf, if that's a solid number, is pretty amazing for all that we are going to get!

By the way, we were interviewed by reporter Lisa Skolnik for a piece in the AIA's monthly trade magazine's March issue. Once it comes out, I will certainly post here. Very exciting!!

What's New II

I apologize for taking such a long hiatus. It doesn't mean that things have not been moving along at record pace. Last I posted, we were starting the Green Homes process. Jeff made modifications to the design that made sure we were going to comply with all the Green Home requirements. For instance, I was told that we have to have a vegetable garden. Not that I'm against this, but we've never been able to succesfully keep a house plant alive, so it will be a challenge. Meeting the Green Homes requirements allowed us to qualify for the Green Permit process (explained in a previous post). While normally a single-family home can be "self-certified," we (Jeff) were asked to go through each trade individually because of the fact this would be the first time they were examining a home that would be built in this manner.

The process went fairly smoothly. The one surprise is that they wanted structural engineering specs detailed on the permit drawings, which, as we were told, is something that you usually do not need to do until after you receive your permits. But we complied, and now the permit drawings are complete.

Jeff recently put the project out to bid with seven general contractors. This is beneficial because we received some preliminary pricing from the modular home manufacturer, but are still awaiting numbers for the excavation, foundation and finishing work. We are really hoping that the responses we get from the general contractors are competitive. It would be silly to manufacture an "affordable" home and have the costs of the site prep make the project unfeasible. We are hoping to find a GC who is as committed to the project as we are, who wants to show that there's a different way that you can provide housing for people that is sustainable and not break the bank. I'm positive that we will find the right guy (or gal) to make this project a success!

In the meantime...we have been making "selections." Selections for pretty much everything, from the tile in the bathrooms to the color of the house. Again, besides needing to nail down these details, it is part of solidifying the project budget to finally estimate what this project is going to cost, and, especially, to determine how much we have to borrow. Finding a lender has been a whole other ballgame. I will refer to this in another post.

So we decided to go with bamboo floors for the entire house, except for the tile flooring in the baths. Jeff picked out a "strand" pattern which looks like it is going to be beautiful. As potentially mentioned before, although we want our home to be "affordable," we still have high end tastes.

We did decide to go with EcoUrban to do our kitchen and bath cabinetry. Again, EcoUrban is located in the city at 15th and Western, and do all their manufacturing here as well. Even better, they hire locally, which makes me like them even more. Again, all their cabinetry materials are urea formaldehyde-free, so it is a more sustainable product.

EcoUrban pricing has been incredibly reasonable for the quality of product they offer. Our cabinetry in the kitchen will be "floating," or mounted on the wall, both upper and lower cabinetry. The upper cabinets will be glass with bi-fold doors that close upwards. We will have sustainable stainless steel countertops to complement the room.

We also are including high-end appliances. Some may think this is unnecessary, and perhaps it is, but I enjoy cooking, and I've been told that the right appliances can make me cook like a pro! So, yes, our appliances are Miele, Wolf and Dacor. We did find an appliances store in town that gave us very reasonable pricing on these items, and we even got lucky enough to find a Wolf oven in a display showroom that we are going to get for a deeply discounted price (this certainly helps!!). The refrigerator (Miele), dishwasher (Miele), exhaust hood (Broan) and clothes washer (Whirlpool) are all energy-star rated, as required by Chicago Green Homes.

There are two things that do not necessarily meet the affordability goal, but are so cool that we have stretched our budget to include them. The first is that we would like a floating staircase with wood treads. I'll be honest, we just love the way these look, and this is our dream house, and, darnit, we want one! Also, and this is a recent phenomenon, we looked at Jeff's webpage for the C3 and noticed the ultra-cool fireplace --- the FireOrb (http://www.fireorb.net/). I'll be honest. I don't know that we can really afford this, but it is sooo cool. I want one.

As to colors for the outside of the house, we are still undecided. I'm liking a steely blue, Michael seems to like a rust color. I'm sure we will not figure this out until someone tells us we have to, so we will keep you posted.

We are very excited that the windows on the house will be manufactured by another local company, Serious Windows, who have come up with a technology to makes incredibly energy efficient windows.

Well, that will give you something to chew on for the moment. Will definitely be posting more frequently as things are really beginning to take off!

What's New?

It has been quite a while since I last posted, but plenty of things have been going on. Jeff and Kate submitted all the paperwork for the Chicago Green Homes and we have been approved. Also, we made it through Zoning Review unscathed. Next --- building permits.

Remember, only a few if any similar projects have been done in Chicago, so we are breaking new ground. Because we qualified as a Chicago Green Home, we are allowed to go through the expedited Green Permit process, which allows you to receive your permit more speedily than non-green projects. As we start this process, I'm sure I will have plenty to report on..

As for now, Michael and I are doing the fun stuff --- picking out the designs for our kitchen and baths. For our bath vanities, we went to Advantage Kitchen and Bath in Niles, Illinois. They have a very nice selection and excellent sales people.

As for our kitchen design, we are in love with modern kitchens, especially with fully integrated appliances. But the well known companies that provide this, like Poggenpohl and ArcLinea, are incredibly pricey. We are planning to get some quotes, but are a little disheartened by the projected costs.

Fortunately, Jeff found a company called EcoUrban Collection ( http://www.ecourbancollection.com/index.html )which is a line of environmentally responsible, American-made, Eurostyle cabinetry for kitchens, baths and offices. From what we've seen on their website, we like their vision and their quality. And according to one of the owners, these are much more reasonably priced than comparable companies. Another great thing about them is that they are local, rather than having components coming from Germany or Italy. We are anxious to see their wares and determine if they are the right designers for us!

The C3 Explained

I've been asking Jeff Sommers to fill me in on his inspiration to embark upon this project and what principles went into the design of the C3. He describes the Urban-C3 as 'Green Prefabricated Housing for the Working Middle-Class, of which we surely are such. I will let him describe in his own words:

There are a rapidly growing number of existing and potential homeowners who are compelled to increase the energy efficiency of their homes as a way to reduce their expenses and negative impact on the environment. However, due to the premium costs generally associated with constructing highly energy efficient structures, the majority of these working middle-class families cannot afford to support these desires.

Our primary goal with this project is to propose a solution for this dilemma; to provide sustainable housing that is affordable for the working middle-class family through the utilization of prefabrication and the methods of the modular housing industry.

Why Prefab?

Prefabricated (also referred to as 'systems built') homes are built as modules within a factory controlled setting as opposed to conventional 'stick-built' homes that are constructed on site. There are a number of advantages to building homes this way:

• First, there is a higher level of quality control when constructing a building in a factory setting instead of outside in the elements, so the home is generally of higher structural integrity.
• Second, prefab homes can be constructed year-round and multiple modules can be built simultaneously, saving time and money.
• Third, it minimizes waste. Because the manufacturer is building so many homes at once, the scraps are reused on other projects instead of going into a landfill.
• Fourth, economies of scale reduce our labor and material costs through a repetive assembly line process and volume purchases from dedicated vendor relationships.

Due to this control over the construction process, materials, and labor costs, prefab homes can be produced at a consistently higher quality AND at a substantial savings over traditional construction.

Integrated Design Process

Together with our local energy consultant, we are collaborating with a fabrication facility in Indiana to develop construction details and pricing that will produce a highly energy efficient building shell and systems to substantially surpass the standard Energy Star rating and achieve a HERS rating that will qualify the homeowner for a Department of Energy tax credit. In addition, we intend for this project to be a certified Chicago Green Home, be LEED (Leadership in Energy and Environmental Design) ready, qualify for the NAHB (National Assoication of Home Builders) green program, and the American Lung Association Health House program. The C3 has recently been preliminarily reviewed and enthusiastically supported by decision makers within the Chicago Building Department, Chicago Green Permit program, and Department of Planning. This integrated design process between our consultants, vendors, and city officials helps us make wise decisions early so that we can control expenses for the U-C3, and produce the most energy efficient building within a given budget.

Benefits for Chicago, the Environment, and our Residents

Providing an affordable, energy-efficient housing solution for the residents of Chicago is the primary benefit to the City, and reiterates Mayor Daley's initiatives to lead the way in energy and environmental conservation. This benefit goes hand in hand with Mayor Daley's pledge to provide a network of affordable options for not only low-income residents, but for the working middle-class.

In addition to providing affordable housing, this project addresses other key environmental issues such as (but not limited to):

• Green roofs and the reduction of heat island effect
• On-site renewable energy
• Overall reduction of energy use (and expenses) through highly insulated building shell
• Passive solar techniques and natural ventilation
• High efficiency mechanical systems and appliances
• Recycled/low-impact finishes
• Water-based & no-VOC finishes for superior indoor air quality
• On-site water management (no stormwater run-off into sewer system
• Minimizing nonpermeable surfaces
• Minimizing land useage
• Superior indoor air quality
• Minimizing water and utility useage
• Sourcing of materials from local vendors

The C3 is designed for the middle-income budget, integrating a holistic approach to the building process by merging economy with ecology. A modern open floor plan organized around a private courtyard provides a dialogue between an urban lifestyle and the natural landscape. In addition to eco-friendly amenities, the C3 is designed with components that reduce energy and construction costs, ultimately saving the homeowner money while minimizing impact on the environment.

Chicago Green Homes Program

Today I signed the Chicago Green Homes Applicant Agreement. This is the first step in the process to get the house certified as a Chicago Green Home.

The purpose of the Chicago Green Homes Program is to encourage residential builders, developers and homeowners to use technologies, products and practices that will:
• Provide greater energy efficiency
• Provide healthier indoor air
• Reduce water usage
• Preserve natural resources
• Improve durability and reduce maintenance, and
• Reduce waste and pollution

The Chicago Green Homes Program, administered through the City of Chicago Department of Environment, provides tools and strategies for building homes and multi-family buildings that are energy-efficient and environmentally responsible. During the design phase, an architect or developer can reference the Chicago Green Homes Checklist to choose from a range of strategies, each with an associated point value. The intent of these guidelines is to provide a framework to reduce the environmental impact of single-family homes and multi-family buildings by those who develop and live in these buildings.

There are three possible target ratings (One Star, Two Star, Three Star) based upon the number of points earned in the following categories: 1) Sustainable Sites (e.g. developing on a brownfield site or a site accessible to public transportation within 1/2 mile), 2) Energy Efficiency (e.g. exceeding Chicago energy conservation code or using energy efficient mechanical systems), 3) Materials (e.g. sustainable and energy efficient materials used in construction), 4) Health and Safety (e.g. indoor environmental quality and ventilation), 5) Resource Conservation (e.g. water conservation or recycling of construction waste), 6) Homeowner Education and 7) Innovation (I think you have to come up with this yourself!).

There are numerous points that can be acheived (I stopped counting at 589), but for a single-family new construction home, which we are building, 200 points = One Star, 300 points = Two Stars and 350 points = Three Stars. I believe the U-C3, as designed, meets the Three Star criteria.

Those developments that qualify will receive a Chicago Green Homes Certificate from the City of Chicago Department of Environment. I know what you're thinking...so what? Well, besides the pride of knowing you have a sustainable and energy efficient home, I think the ultimate benefit is that projects that are certified Chicago Green Homes may also qualify for an expedited green permit process.

The City of Chicago's Green Permit Program offers an incentive to developers through 1) expedited permit review --- meaning that a building permit can potentially be turned around in approximately 30 days (a process that comparably could take 90 days), and 2) potential waiver or reduction of permitting fees.

The other benefit of being a certified Chicago Green Home is primarily for developers, who are able to market their homes using the Chicago Green Homes logo, and have their projects recognized on the City of Chicago's website. Certainly in this market, every little bit helps.

I believe these programs are a result of the Chicago Climate Action Plan (http://www.chicagoclimateaction.org) which "describes the major effects climate change could have on our city and suggests ways all of us can work together to address those challenges." Should you have the time, you can download the entire report and see what intiiatives have been planned already, and what programs the City is planning for the future.

We Have Land!

Isn't it gorgeous! Okay, okay, but I see greatness in this land. Closing went without a hitch. So now it's real.

So things may slow down for a while until Jeff prepares the estimate and we sign a contract with Square Root. What I plan to do next is outline Square Roots principles for this house and all the great energy efficient technologies that are able to be tapped into, even at this affordable level.

Land Continued

So, I have to make one correction. I was told by Jeff Sommers that, in fact, this would not be the first prefab house in Chicago. He told me that prefab elements of certain homes have, indeed, been done before in Chicago, so to specify, this would be the first prefab modular home in Chicago. There, I feel better now.

So, to continue, we mentioned that we fell in love with a site in East Village. While I don't want to disclose the price, Abraham confirmed that, per square foot, it was very reasonably priced per square foot compared to other comparable properties in the neighborhood. That didn't mean that we didn't want to get a bargain! So, we decided to put in an offer. Our initial offer was at least 10% below asking price. Well, this didn't fly with the seller. Apparently the seller had found a buyer previously that they weren't please with, to say the least, and for over six months, continued to file for extensions for the closing, and he (she) had had enough. Here was our dilemma: we had the cash to close quickly on the property, and we could afford their asking price, but did we want to take a chance to buy property without knowing if we could get permits? Well, apparently the answer was yes (eventually). We loved this site, and we were willing to take the chance. So, as it goes, we are closing on the land tomorrow. Is this the smartest tactic? Well, probably not. But we're so optimistic that we will accomplish what we set out to do, that we're willing to take the chance.

As to the timing of the rest of this, we are waiting for Jeff to come up with an estimate of how much we will be expecting to pay for the house. Oh yes, we have grand ideas....we want a floating staircase and upgrades to appliances and kitchen cabinets and bathroom vanities. Can we do all this? Not sure yet. In fact, Jeff thought we were going to require major modifications to the model he's designed. But, in fact, we are happy with the layout. The only issue we have had with the existing layout is we feel that the living room is rather narrow. Not much to be done about that, but except for a few small modifications, I think we're happy with the model as designed. Jeff and his staff have done a bang up job at designing this home, and we're just thrilled to be a part of its "coming out." Hopefully this will be the first of many U-C3's in the city.